FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011 Page: 5,323
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demand, the utility, not the attacher, owns the pole.573 The utility therefore benefits from this situation in
a number of ways, including its recovery upfront of all of the costs the third-party attacher causes it to
incur. In particular, because poles typically come in standard sizes, the utility is likely to obtain, at no
cost to itself, capacity above and beyond the additional foot of pole space needed to accommodate the
typical third-party attachment. The utility benefits from the extra capacity because it can use that capacity
to supply its own services, rent the capacity to other third-party attachers and realize additional revenues,
and/or save or defer some of the cost of periodic pole replacement needed to provide its own service.
188. Rational Firm Behavior. We find that a third-party pole attacher causes none of the
capital cost of the available space on an existing pole used to satisfy the attachment demand. We base
this finding on basic economic theory and the absence of evidence in the record to support a contrary
conclusion. We first discuss economic theory. As we noted in the Further Notice, section 224 imposes
no obligation onpole owners to anticipate the need to accommodate communications attachers when
deploying poles. ' We agree with commenters who claim that there is uncertainty surrounding future
attachment demand, and therefore there is the risk that the additional cost of extra pole capacity installed
in anticipation of additional demand would not be recovered."7 Moreover, as discussed, the rules we
adopt would impose no unrecoverable cost on the utility, but rather would provide a benefit to the utility,
insofar as a utility that has not considered third party demand is able to install a new pole at the new
attacher's expense. Therefore, we agree with TWTC that utilities typically would not install such extra
capacity in advance purely to accommodate possible telecommunications carrier or cable attachers.576
Rather, we conclude that utilities would install poles based on an assessment of their own needs and, to
the extent that future attachments could not be accommodated on such poles, leave it to the new attacher
to pay the cost of the new pole.77 In this manner, utilities are certain to recover the full cost of the
additional capacity through make-ready charges.
189. We next discuss assertions by the utilities that third-party attachers cause some of the
capital costs of a pole that has space available to accommodate an attachment. In the Further Notice, the
Commission requested that pole owners, to the extent that they contend they incur significant capital costs
outside the make-ready context solely to accommodate third party attachers, provide the nature and extent
of those costs.578 The Commission noted that the Coalition of Concerned Utilities argues that:
(a) communications attachers are responsible for incremental capital costs for the extra space on taller
poles; and (b) those costs exceed the attachers' share of the capital costs for an entire pole that the
attachers bear under the fully distributed cost methodology reflected in the Commission's existing rate
formulas.79 In particular, the Coalition argues that utilities install taller poles routinely throughout their
networks to satisfy their own needs and anticipated third-party attachment demand, and that they do not
receive sufficient compensation for this option.580 The Commission questioned whether such practices
573 Comcast Kravtin Report at 30.
574 Further Notice, 25 FCC Red at 1 1920 n.365.
s75 Comcast Pecaro Decl. at 9-11.
"T Further Notice, 25 FCC Red at 11921, para. 136.
s79 Letter from Jack Richards on behalf of the Coalition of Concerned Utilities to Edward P. Lazarus, Chief of Staff,
FCC, WC Docket No. 07-245 at 2 (filed May 4, 2010) (Coalition May 4, 2010 Ex Parte Letter) (contending that
utility pole owners are not reimbursed for "the considerable additional costs ($180-$310 per pole) required to
construct pole distribution systems that are taller and more expensive than the utilities need for their own purposes.
These additional capital costs are caused directly by the communications attachments, but they are not recoverable
by the utilities since the rate formula does not allow for recovery of incremental capital costs.").
sso Coalition May 4, 2010 Ex Parte Letter at 1-2.
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United States. Federal Communications Commission. FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011, book, April 2011; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc52169/m1/495/: accessed July 24, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.